Spark Infrastructure (SKI)

If there is a price to be paid for missing out on a trophy asset,
Spark Infrastructure
isn’t paying it. Shares in the Victorian power distribution business have rallied 5 per cent since news last week that Spark had been an unsuccessful bidder for the Sydney water desalination plant sold by the NSW government for $2.3 billion. The asset went to parts of the suddenly acquisitive Hastings Funds Management group and the Ontario Teachers Pension Plan. Spark paid them the compliment of saying what a great business the plant was by yesterday releasing a two-page statement setting out their reasons for bidding. They included the “uniqueness’’’ of the asset, that it would add to yield from the outset and that the multiple was below that applied to Spark’s existing business. Investors, though, seem relieved management failed in its quest and has since committed to organic growth for existing businesses.